Tumbling iPod Sales Prompt Price Cut from Apple

The price cutting continues at Apple. First it was a cheaper MacBook Air. Then a new, cheaper iMac entry-level model. This time its iPods that get the cheaper price treatment.

Starting today, the 16GB model goes on sale for $199 (previously at $229). The 32GB model gets a $50 price cut to $249 and the 64GB gets a $100 price cut to $299.

Why the move to lower price points? Revenue from iPod sales tumbled to $461 million in the most recent quarter compared to $962 million a year ago. The drop isn’t really surprising. I’m surprised people still buy them. Most people use their iPads or iPhones for music, audiobooks, etc.

Besides trimming the price a bit, Apple is also adding some features to the 16GB model to bring it in line with the other two models. The 16GB model will now include a five megapixel rear-facing camera and be available in several different colors.

Will this new trend in cheaper Apple products translate to future products? We’ll see when Apple unveils the next set of iPhones later this fall.